Data shows that the Coinbase Premium bitcoin Index has plunged into negative territory along with the latest asset price drop.
Coinbase bitcoin Premium Index is currently in the red zone
As explained by an analyst at CryptoQuant Quicktake mailThe Coinbase Premium index has seen a decline recently. “Coinbase Premium Index” refers to an indicator that tracks the percentage difference between the price of bitcoin listed on Coinbase (USD pair) and that of Binance (USDT pair).
The value of this metric tells us how buying or selling behaviors differ between the user bases of the two cryptocurrency exchange giants.
To be more specific, Coinbase's main traffic is American investors, especially large institutional entities, while Binance has users from all over the world, so the indicator compares the behavior of American whales with global ones.
Now, here is a chart showing the trend in the Coinbase Premium bitcoin Index over the past week:
<img data-recalc-dims="1" decoding="async" class="alignnone aligncenter" src="https://technicalterrence.com/wp-content/uploads/2024/12/Bitcoin-Coinbase-Premium-Sees-Red-Dip-Is-BTC-Rally-Complete.png" alt="bitcoin Premium Index Coinbase” width=”1280″ height=”720″/>
The value of the metric appears to have been going down over the past day | Source: CryptoQuant
The chart above shows that the Coinbase Premium bitcoin Index has seen a sharp drop into negative territory over the past 24 hours. Coinciding with this drop in the indicator has been the drop in the value of the cryptocurrency itself.
The negative indicator suggests that the asset is experiencing greater selling pressure on Coinbase than on Binance. Therefore, given the timing of the trend, it would appear that sales from Coinbase users have driven the price drop.
This pattern has been observed throughout 2024; the price has shown a notable correlation with the Coinbase Premium index. As such, Coinbase users, or American institutional investors, have been in the driver's seat.
If the indicator value continues to be negative in the coming days, then bitcoin may only see a prolongation of its decline. However, it just remains to be seen what the US-based whales decide to do next.
On the other hand, institutional holders have not been the only ones who have participated in the sales recently, as another analyst has pointed out in a Quicktake. <a target="_blank" href="https://cryptoquant.com/insights/quicktake/6763fe873ed5b603492322ee-bitcoin-Hits-108K-Binary-CDD-Spike-Suggests-Selling-Pressure-from-Long-Term-Hold” target=”_blank” rel=”noopener nofollow”>mail that bitcoin (CDD) binary currency destruction days have skyrocketed.
<img data-recalc-dims="1" loading="lazy" decoding="async" class="alignnone aligncenter" src="https://technicalterrence.com/wp-content/uploads/2024/12/1734707390_420_Bitcoin-Coinbase-Premium-Sees-Red-Dip-Is-BTC-Rally-Complete.png" alt="bitcoin Binary CDD” width=”1280″ height=”720″/>
Looks like the value of the metric has been sharply moving up in recent days | Source: <a target="_blank" href="https://cryptoquant.com/insights/quicktake/6763fe873ed5b603492322ee-bitcoin-Hits-108K-Binary-CDD-Spike-Suggests-Selling-Pressure-from-Long-Term-Hold" target="_blank" rel="noopener nofollow">CryptoQuant
The binary CDD keeps track of whether idle tokens are in motion. Old coins belong to the HODLers of the market, so whenever the indicator rises, it is a sign that long-term holders have potentially decided to sell their coins.
The chart shows that bitcoin's binary CDD has been showing this signal recently, which means that the asset has been facing selling pressure from diamond hands.
btc Price
At the time of writing, bitcoin is trading around $100,400, a drop of more than 3% from the last day.
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The price of the coin has plunged during the last couple of days | Source: x/2NLKhPhJ/" target="_blank" rel="noopener nofollow">BTCUSDT on TradingView
Dall-E Featured Image, CryptoQuant.com, TradingView.com Chart
